Indonesia's Second-Largest Airline Garuda Indonesia Offers to Extend Sukuk Tenure

Indonesia's flag carrier Garuda Indonesia (Garuda) has proposed to holders of its USD 500 million Sukuk to switch parts of the debt to equity, take a lesser than optimal return and extend the Sukuk tenure to 10 years as part of the airline's debt restructuring efforts.

Why it Matters?

Garuda has an estimated USD 9.8 billion of outstanding liabilities and has been operating on a negative cash flow throughout the COVID-19 pandemic due to the decline in air travel. The airline is undergoing a Jakarta court-led debt restructuring, known as Suspension of Debt Payment Obligations (PKPU), following a petition made by a vendor to the court over unpaid liabilities.

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